WSJ: new investors in Snap IPO won't get any voting power; founders Spiegel and Murphy, who own 45% of Snap's stock, will retain 70%+ of voting rights
Spiegel and Snapchat co-founder Bobby Murphy want to retain management control of their company. — Before Facebook went public …
Context & Ripple Effects
The WSJ report confirms what Snap's charter filing signaled in November: Spiegel and Murphy are taking the company public with an unprecedented structure in which new investors receive no votes at all. The founders own 45% of the stock but will control 70%+ of voting rights, going further than Facebook's dual-class setup by stripping public shareholders of any governance say.
The timing matters because the same IPO process is exposing how concentrated founder power already is — the filing also revealed Snapchat paid $158M to settle claims from ousted co-founder Reggie Brown, a dispute resolved entirely behind closed doors before outside shareholders existed to weigh in.
First-order effects
- IPO buyers are being asked to pay full price for shares that carry zero voting power, handing Spiegel and Murphy permanent management control regardless of future performance.
Second-order effects
- Institutional investors and proxy advisors face a forced choice between participating in a hot offering on take-it-or-leave-it terms or sitting it out — and if demand holds anyway, every late-stage private company's board now has a template for going public without ceding control.
Third-order effects
- If Snap prices successfully with nonvoting shares, founder-controlled structures become the norm rather than the exception for tech listings, shifting the burden of governance protection from securities markets to regulators and exchanges.
The trend: Tech IPOs are evolving from dual-class share structures toward fully disenfranchised public shareholders, with founders retaining absolute control while tapping public capital.